Audible, Inc. was founded in 1995 and has been public since 1999. Their primary business is providing audio content over the Internet. The content provided includes digital audio editions of books, newspapers, and magazines, original audio content, and radio and television shows. Customers can purchase any digital content and download it to their computers, mp3 players, PDAs, or Smartphones. Customers have the option of downloading content from Audible's web site (www.audible.com) or Apple's iTunes web site (www.apple.com/itunes).

Analysis of Demand

People today are crunched for time--working long hours, traveling, and commuting, but still try to maintain balance in their personal lives. Portable entertainment devices integrate well into such a fast-paced, multitasking lifestyle. Driven by the popularity of iPods, mp3 players, and Smartphones, a new market for audio books and other spoken word programming has emerged. In addition to audio books, magazine and newspaper companies now have an additional channel to market to an even wider audience.

Average Fixed Costs

English: The iPod family with, from the left to th...

audible.com

For people who like to read but don't want to dedicate as much time to reading, listening to audio books is a natural solution. While books on tape and CDs have been around for decades, they are increasingly being replaced by downloadable formats like mp3. Interestingly, according to Audible, 50% of its customers--nearly 308,800 in the US have never bought an audio book on tape or CD. Technological advances have created this new market segment that recognizes the value of being able to "listen" to a book. Within the audio books market, downloadable audio content is the fastest growing segment. As the popularity of the iPod and other portable listening devices continues to grow, so too will the demand for audio books that can be downloaded directly to these devices and to PCs.

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